How is a break even point plotted on a Cost Profit Analysis graph?

Answer 1

A break-even point is where the income finally matches the expenses. You don't get any money, but you don't lose any either.

You have to use a system of equations, then solve it.

Example Question:

A fashion designer makes and sells hats. The material for the hats costs $5.50 and sell for $12.50. The designer spends $1400 on advertising. How many hats must the designer sell to break even?

Step 1- x= number of hats sold

y=the number of dollars of expense or income

Expense: y=5.5x+1400

Income: y=12.5x

Step 2: Substitute the solved equation into 'y=5.5x+1400'

y=5.5x+1400 Start with 1 equation

12.5x=5.5x+1400 Substitute in '12.5x' for y (because y=12.5x)

7x=1400 subtract 5.5x from each side

x=200 Divide each side by 7

Since x means the number of hats sold, 200 hats were sold.

Therefore, the designer must sell 200 hats to break-even.

Answer 2

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